Social Policy Needs More Than Behavioural Economics

1.
Share this Opinion Leader
Why social policy needs more than the behavioural economics bandwagon
Brain Game

2.
Share this Opinion Leader
2
Why social policy needs more than the behavioural economics bandwagon
Behavioural economics insights can
help break through the final barriers to
behaviour change – but policymakers
who believe they have found a “magic
bullet” solution may risk disappointment.

3.
Share this Opinion Leader
3
Why social policy needs more than the behavioural economics bandwagon
For policymakers,
trying to change
human behaviour
the old-fashioned
way is expensive,
risky, and fraught
with failure.
Launching wide-reaching education programmes,
and canvassing support for new laws or fiscal
policy; altering financial incentives in favour of new
behaviour and trying to convince populations of the
rational reasons for acting that way: all are costly,
potentially controversial and come with uncertain
outcomes. High-profile campaigns that fail to
meet well-publicised targets whilst stirring public
resentment in the process are rarely a preferred
option for governments.
So it’s no surprise that policymakers get excited
when told there’s an easier way: a means of
changing behaviour by flying under the radar,
spending less and making adjustments to daily life
that few people could reasonably disagree with.
That, in a rather crude nutshell, is how behavioural
economics has been packaged when it comes to
changing behaviour in the social policy space: a
subtle, clever alternative to cumbersome government
policy and education programmes. From the UK,
where the government has established a Behavioural
Insights team (colloquially christened the “nudge
unit” after the popular book by Thaler and Sunstein),
to the US, Europe and Australia, policymakers
have been encouraged to manoeuvre populations
towards desirable behaviour by adjusting the
situational cues revealed by behavioural economics
thinking. However, it is becoming increasingly clear
that rearranging such behavioural triggers is not
the complete solution. And in placing too much
faith in them, governments could be abdicating
responsibility for the real challenges of changing
behaviour, and sustaining that change over time.

4.
Share this Opinion Leader
4
Why social policy needs more than the behavioural economics bandwagon
Changing the System?
According to Daniel Kahneman (arguably, together
with his colleague Amos Tversky, the inventor
of behavioural economics), the human mind
uses two systems to guide its decision-making.
System 1 decisions are fast, experiential and often
subconscious. System 2 decisions are more reflective
and deliberative, and take more cognitive effort.
An example of a behaviour driven by the reflective
system would be purchasing a new car. At least for
most people, this involves some conscious thought
and planning, and would reflect the person’s values
and beliefs about different car brands. As such it
forms part of System 2. In contrast, locking the car
after parking it in a car park is generally something
we do automatically, often without thinking at all.
It is an unconscious, habitual behaviour, part of the
System 1 decision-making that, Kahneman and others
have concluded, governs most of our behaviour.
The emergence of behavioural economics has
significant implications both for our understanding
of how to influence behaviour, and for the task of
conducting behavioural research more effectively.
And in both of these areas, researchers must grapple
with the challenge of integrating insights from both
behavioural systems.
Many have responded to this challenge by concluding
that, since System 1 is the immediate governing
force for much of our day-to-day behaviour, it should
replace System 2 as the primary focus of our research
efforts. In doing so, they have started to mine very
different sources of insights on human behaviour,
but they risk replacing one blinkered approach with
another.
Whilst behavioural economics has made an invaluable
contribution, it does not have all the answers. It is not
the ‘magic bullet’ that will solve all problems. Instead
a balanced, holistic approach is needed – a blending
of the best from behavioural economics with the best
from traditional behavioural sciences.

5.
Share this Opinion Leader
5
Why social policy needs more than the behavioural economics bandwagon
The hidden world of subconscious influences
Behavioural economics has highlighted two previously
unexplored sets of influences that together make up
our System 1 means of navigating the world. And
on occasions, these influences can have a significant
impact on the success of social policy initiatives.
The first set of influences is external, situational cues,
aspects of our physical environment that dispose us
to behave in a particular way. The second is made
up of internal rules of thumb and mental shortcuts
(heuristics) that we use to help us make decisions
quickly and effectively but can sometimes bias us
towards courses of action that may not appear to be
in our best interests. Together these sets of variously
pre-programmed responses help to explain why
people fail to behave in the way we might expect;
why they stubbornly refuse to follow what traditional
economic theory might consider rational behaviour.
Carefully researched behavioural economics insights
can produce some eureka moments when it comes
to changing behaviour, especially when financial
incentives, moral arguments and appeals to rational
self-interest have failed to deliver. In the UK, after
generous subsidies had failed to persuade expected
numbers of people to insulate their lofts and so
make their homes more energy-efficient, a pilot
test demonstrated that offering to clear out lofts at
cost-price, as part of the offer, increased response
rates five-fold. The situational context that lofts
were untidy, crammed full of stuff and needed to be
emptied before they could be insulated had been
obstructing the rational motivation to save money
and the moral incentive to help the environment.
Changing this context made a very significant
difference.

6.
Share this Opinion Leader
6
Why social policy needs more than the behavioural economics bandwagon
Yet providing the final piece of the behaviour
change jigsaw is not the same as offering the full
picture. The triggers illuminated by behavioural
economics are not the full sum of relevant insights
on human behaviour. Choosing to believe that they
are – and that populations can be discreetly nudged
in one direction or another using these alone – may
be wishful thinking.
In the UK, a 2011 House of Lords report looked at
the impact of behavioural economics approaches to
policy through an extensive review of the research
literature and input from numerous academic
experts. It concluded that, although important, the
non-regulatory environmental measures suggested
by behavioural economics are less likely to be
effective if used in isolation. Effective policies
require a full range of interventions.
The importance of deliberative context
Removing situational barriers to citizens changing
their behaviour can only produce sustainable, lasting
results when those citizens have concluded internally
that it is a change that is right for them. Without such
agreement, the effect of manipulating the ‘choice
architecture’ is likely to be temporary – and could
even be counter-productive. There is the potential
for criticism and the undermining of moral authority
if citizens believe they are being manipulated into
behaving in a way that they do not agree with, or
which is none of the government’s business. It is one
thing to make it easier for people to do the right
thing when it comes to energy efficiency; it would be
another to nudge them into buying national lottery
tickets, or to restrict traffic flow in city centres in an
effort to persuade more motorists to take the bus.
They may not be as appealing as behavioural
economics fixes, but deliberative, reflective systems
that help to form the views and beliefs of individuals
constitute a context that is still vitally important to
anyone seeking sustainable changes in behaviour.
In order to understand fully why people behave the
way they do, we need to commit to an integrated,
holistic approach that steers clear of judging in
advance which system of thinking holds the greatest
influence over our actions. And we require an equally
holistic approach to research techniques, to reveal
precisely how the different systems interact with one
another where particular behaviours are concerned.

7.
Share this Opinion Leader
7
Why social policy needs more than the behavioural economics bandwagon
An integrated approach to behaviour change
The fact that behavioural economics delivers valuable
insights on the drivers of human behaviour does not
make the insights of psychology or anthropology any
less valuable. A diverse web of influences governs
what we do, and achieving long-term, sustained
behaviour change requires us to address most, if not
all of them.
The web includes several psychological factors:
conscious perceptions of the costs and benefits of
adopting a desired behaviour, of the efficacy of that
behaviour, and of the legitimacy of the government’s
position in encouraging people to adopt it; and it
also includes the subconscious factors, both internal
and external, that are illuminated by behavioural
economics (habit, heuristics, context). Additional roles
are played by our internal value system (often referred
to as ‘morality’), social norms and cultural traditions,
which have been the focus of work in anthropology.
Habit
Cost and
benefits
Morality
Behaviour
Social and
cultural norms
Context /
Setting
Legitimacy
HeuristicsEfficacy
Psychology
Behaviouraleconomics
Anthropology

8.
Share this Opinion Leader
8
Why social policy needs more than the behavioural economics bandwagon
On your bike: behavioural science applied
Encouraging people to cycle rather than drive to
work is a goal of many governments in developed
countries, and one that promises benefits in terms
of improved population health, reduced congestion
on roads and public transport, and a contribution to
carbon reduction targets. Seeking to understand
the influences that weigh upon individuals’ decisions
whether to cycle to work or travel by other means
demonstrates the complex interaction of all of the
influences in our behavioural web when it comes to
understanding and influencing behaviour.
The psychological factors begin with conscious
perceptions of the costs and benefits of cycling for
each individual: on the one hand they will be
travelling in the fresh air, saving money, getting fit
and thus feeling better and more attractive; on the
other they risk injury (or even death) on potentially
unsafe roads, they could spend much of their journey
breathing in traffic fumes and they could arrive at work
looking sweaty and unkempt. And of course, they
must first fork out for a decent bicycle. All of these
are conscious considerations, as to whether cycling is
a good idea or not. To suggest that such conscious
reflections have no influence over our decision to
cycle is wrong.
Equally conscious are people’s perceptions of the
efficacy of taking up cycling: Can choosing not to
drive to work help prevent climate change – or is
the planet doomed to global warming anyway?
Perceptions of self-efficacy can be equally influential
to the deliberative process: do people believe they are
fit enough to cycle to work regularly? Do they have
the willpower? Or will they simply buy an expensive
mountain bike and leave it standing in their shed?
The question of legitimacy, whether the government
has the right to suggest how people travel to work,
is the third psychological factor, and one that has
considerable influence over how behaviour change
messages can be presented. Do people believe that
the government is within its rights to attempt to
change their behaviour in this way? Do they agree
that climate change is a threat that justifies them
leaving their cars at home? Or do they believe that
such individual choices are none of policymakers’
business?

9.
Share this Opinion Leader
9
Why social policy needs more than the behavioural economics bandwagon
The issue of legitimacy can be significantly influenced
by the anthropological factors that occupy the centre
of our web: social and cultural norms and perceptions
of morality, including whether cycling to work and
doing your bit to prevent carbon emissions is seen as
the “right” course of action.
It is only in the context of individual judgements and
beliefs that instinctive behavioural economics-related
factors can act on individual choices. It may well
be that the actions that constitute many people’s
morning commute are habitual: automatic sequences
of behaviour that propel them unthinkingly from
waking in the morning to settling into the driver’s seat
of the car, or dressing in a suit and heading for the
bus or train; heuristics such as always choosing the
quickest or simplest journey could bias choice towards
cars; contextual factors such as the availability of bike-
locking facilities, dedicated cycle lanes and showers
at work could exert a big influence over whether
people saddle up or not. Seeking to disrupt habits,
introduce new heuristics and prepare the contextual
ground for people cycling to work all play a critical
role – however time and effort spent adjusting these
behavioural economics levers could be largely wasted
if the psychological concerns of large sections of the
population have not been understood and addressed.
Carefully designed choice architecture such as banks
of easy-to-hire bicycles at commuter railway stations
are only likely to impact on the behaviour of those
who have already decided, implicitly or explicitly, that
cycling is right for them.
In search of sustainable behaviour change
The real challenge in the public policy space is not
simply to unearth a range of potential contextual
triggers that could conceivably nudge behaviour in
one direction or another; it is to understand exactly
how such triggers interact with the psychological
and social factors that exert sustained influence over
people’s behaviour. Even habits, the most powerful
of unconscious influences on what we do, tend to
form in line with our priorities and motivations. To
seek to manipulate habits and heuristics without a full
understanding of the deliberative forces that formed
them is to tackle behaviour change with one hand
tied behind our backs.
This is why the current infatuation with behavioural
economics risks missing the full picture of why people
behave the way that they do, particularly if it implies
the rejection of all forms of behavioural insight that
have come before.

10.
Share this Opinion Leader
10
Why social policy needs more than the behavioural economics bandwagon
A holistic approach to researching behaviour
Traditional research techniques reflect traditional
views about how people make decisions: in a
deliberative way that can be consciously recalled. In
the language of Systems 1 and 2, traditional research
techniques have been good at understanding System
2 decisions but quite poor at understanding and
measuring System 1 behaviours. If it is System 1 that
governs much of our behaviour, then this is clearly a
problem. However, it is not an insurmountable one.
Proven techniques for uncovering the role of System
1 exist. Rather than relying on direct questioning,
researchers can observe behaviour through the
techniques of ethnography, or they can seek to
recreate contexts in order to analyse their impact on
behaviour, as in the case of cognitive interviewing,
projective techniques and controlled behavioural
experiments. All of these techniques are now vitally
important parts of the research toolkit.
Some commentators have even advocated that we
should abandon traditional research techniques
altogether and depend entirely on such System
1-attuned approaches instead. Ewing and Pankauskas
,in their award-winning ESOMAR paper, argued that
“research without questions is not only possible,
it’s often essential – it’s the best way to get at what
people actually do, not just what they say they do”.
But knowing what people actually do is not enough
where social policy is concerned.
When it comes to consumers’ choice of products or
brands, particularly in low-involvement categories,
knowing the truth about people’s behaviour and
unconscious responses may constitute a complete
insight in itself. But where our task is to influence
more complex decisions, it is not. Knowing what
people really do in relation to their health, their kids’
education, their ageing parents, the social cohesion
of their community, the broader environment,
and so forth, is of little value without a deeper
understanding of why they behave that way. And
for this understanding to be truly complete, it must
incorporate all relevant elements of the behavioural web.

11.
Share this Opinion Leader
11
Why social policy needs more than the behavioural economics bandwagon
For this reason, insights for sustainable behaviour
change in the field of social policy can only come
through a balanced approach to research, which
fully embraces the new methods of behavioural
economics but uses these to augment rather than
replace traditional interview techniques. Such a
holistic approach does not necessitate bigger research
budgets. Making intelligent use of ethnography and
cognitive interviewing to construct a precise audit of
people’s behaviour can reduce the number of focus
groups needed and inform shorter, smarter surveys.
The net effect on research spend should be neutral.
Putting “all the eggs in the behavioural economics
basket” is no less misguided as the now out-dated
notion that all human behaviour is logical, rational
and consistent with internal beliefs and values.
We have the techniques available for integrating
behavioural economics insights with others that are
proven to help deliver sustained behaviour change. It
is vital for the on-going success of social policy that
we use them.
We have the techniques available for integrating
behavioural economics insights with others that are
proven to help deliver sustained behaviour change.

12.
Share this Opinion Leader
12
Why social policy needs more than the behavioural economics bandwagon
About the author References
Mark Francas has a strong interest in behaviour change,
social marketing, and public policy development. He is
the Head of the Behaviour Change Institute within TNS
Political & Social, comprising senior TNS researchers and
international academics. The Institute has developed an
industry-leading model, based on the latest thinking in
behavioural theory and behavioural economics, which is
used by many national governments, NGOs and donor
organisations. A Fellow of the AMSRS, Mark has received
several prestigious industry awards recognising his work.
Kahneman, D. (2011) Thinking, Fast and Slow. Allen Lane.
Behaviour Change. Report of Science and Technology Select
Committee. House of Lords. UK. July 2011.
Ewing, T. and Pankauskas, B. (2012) Research in a world
without questions. Esomar conference.
French, J. (2012) Why Nudging is not enough. Emerald
Publishing.
Thaler, R. and Sunstein C. (2008) Nudge: Improving
decisions about health, wealth and happiness. Penguin
Books.
Ariely, D. (2008) Predictably Irrational: The Hidden Forces
that Shape our Decisions. HarperCollins.
Cialdini, R. (2007) Influence: The Psychology of Persuasion.
Collins Business.
Priluck, J. (2013) The overselling of behavioural economics.
Reuters Online.

13.
Share this Opinion Leader
13
About Opinion Leaders
Opinion Leaders is part of a regular series of articles from TNS consultants, based on their expertise gathered
through working on client assignments in over 80 markets globally, with additional insights gained through TNS
proprietary studies such as Digital Life, Mobile Life and the Commitment Economy.
About TNS
TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and
stakeholder management, based on long-established expertise and market-leading solutions. With a presence
in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands
individual human behaviours and attitudes across every cultural, economic and political region of the world.
TNS is part of Kantar, the data investment management division of WPP and one of the world’s largest insight,
information and consultancy groups.
Please visit www.tnsglobal.com for more information.
Get in touch
If you would like to talk to us about anything you have read in this report, please get in touch via
enquiries@tnsglobal.com or via Twitter @tns_global
You may be interested in...
Behavioural economics: the complete picture? >
The value of context: or what qualitative research
can learn from behavioural economics >
Breaking the habit code >
The secret life of the brain >